Massachusetts saw 1,198 foreclosures initiated in July – the lowest monthly level so far this year, according to industry tracker The Warren Group.Year-over-year petitions were down almost 17 percent, dropping from 1,441 petitions in July 2011.

Still, foreclosures are up 55 percent from a year ago. A total of 10,623 foreclosure petitions have been initiated so far this year, up from 6,856 petitions filed during the same period last year.

“It appears there is a downward trend in foreclosure activity,” said CEO Timothy M. Warren Jr. in a statement. “A strong economy and recovering housing market is helping lift consumer confidence. This news paired with banks’ return to standard foreclosure processes is also helping.”

Foreclosure deeds dropped to 648, a 17 percent decrease from 782 in July 2011. This marks the fewest number of completed foreclosures for any month this year. It is the slowest month since May 2011 when there were 571 foreclosure deeds. A total of 5,409 foreclosure deeds have been filed so far this year, an 18.5 percent increase compared to 4,564 deeds recorded during the same period last year.

“Foreclosure activity has been fluctuating for the past year or so — slowing after several banks delayed and examined their own proceedings, and then ramping back up,” Warren said. “It appears we’re seeing a clearer picture now — less starts and deeds which means homeowners are making payments and working out defaults through short sales and loan modifications.”

The number of auction announcements tracked by The Warren Group also decreased in July. Auction announcements declined 14 percent to 1,135 from 1,319 in July 2011. From January through July, 9,267 auctions have been announced, an 8 percent decline from 10,107 auctions during the same period in 2011.